How should you plan the transition of your business, your family and yourself?

After decades building a company that provides for your family, supports your employees and serves loyal customers, the question becomes: what happens next? Will the business thrive after you are gone, and how do you secure your family's future and your own? Baby boomers (born 1946 to 1964) own 42% of small businesses in Canada, and a 2017 BDC survey found 41% of entrepreneurs expect to exit within five years — yet most are not prepared.

Why transitions so often fail

- 33% of family businesses survive into the second generation
- 20% of businesses transact for sale
- 75% of owners have no formal transition team
- 80% have no written transition and succession plan
- 50% have done no planning at all
Many owners regret exiting within the first year due to a lack of preparation and clarity about their future.

Plan three aspects at the same time

1. Business succession planning — a clear strategy for passing leadership to the next generation, employees or a strategic buyer
2. Financial, tax and estate planning — structure personal and family wealth for long-term security and minimize tax liabilities
3. Life-after-business planning — decide what your future looks like post-business, including new purpose and passions

Transition planning is not a solo endeavour: combine legal, tax, accounting, wealth and sell-side advisory expertise, and lean on a personal coach and a peer group of founders who have walked the same path.

Key facts: transition planning

Boomers own 42% of Canadian small businesses; 41% expect to exit within five years (2017 BDC survey)
Only 33% of family businesses reach the second generation; about 20% transact for sale
80% of owners have no written succession plan; 50% have done no planning whatsoever
Plan three things together: business succession, financial/tax/estate, and life after business
Build a team: legal, tax, accounting, wealth and sell-side advisors, plus a coach and peer group

Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.